Neighbourhood composition and economic prospects: a longitudinal study in the Netherlands

Publication

Publication

How does the “social” and “cultural” neighbourhood composition impact on the economic
prospects of its inhabitants?’ We addressed this question, while using a new longitudinal dataset.
We analysed the individual income changes between 1999 and 2005 of all Dutch 18–49 year-olds
(subdivided in four strata) who stayed in the same neighbourhood throughout the period while
focusing on the role of neighbourhood after controlling for a range of individual variables. The
impact of neighbourhood contexts is statistically significant, yet limited compared to the impact of
individual characteristics. Social context – neighbourhood median income and income mix –
turned out to be most relevant in terms of neighbourhood impact. Higher median incomes and
more income mix in the neighbourhood have significant positive effects on individual income
development.